136 



BEPORT — 1889. 



actually existing in currency, or relative to an initial epoch. He need 

 not pretend to calculate the amount of gold in use as money at present, or at 

 the initial epoch. He need not pretend to calculate the ratio in which the 

 quantity of gold at the initial period requires to be multiplied in order to 

 equate the present with the original level of prices. He need not state 

 the amount which for that purpose should be added to the present cur- 

 rency. What he professes to obtain is that ratio in which, if the quantity 

 of currency were increased, other things remaining constant during 

 the increase, the level of prices would be restored. But the amount 

 of coin to be actually added is not necessarily deducible from the ratio 

 thus conceived; because (1) the quantity of precious metal in use as 

 money may not be ascertainable with any degree of precision, and (2) 

 other things, in particular the condition of credit, may alter during the 

 process of augmentation. In short our Professor is not to be confounded 

 with the currency-quack who pretends to calculate the exact dose of 

 currency which ought to be administered in order to keep the circulation 

 in a healthy condition. Professor Foxwell's Index is rather of the nature 

 of a diagnosis than a prescription ; or at least it only enables him to pre- 

 scribe the general character of the treatment — whether increased aliment 

 or depletion — but not the exact quantity to be taken. 



The Currency Standard, as Professor Foxwell's special protege may 

 be designated, is to be distinguished as follows from the Consumption 

 Standard, which the Committee, in their collective capacity, have 

 favoured. According to each method, the variation in the value of 

 money is measured by a change in the monetary value of a certain quan- 

 tity of commodity, supposed to be constant. But the standard quantity 

 is not the same for the two methods. The choice is between the sum of 

 valuables consisting of all the finished goods which pass into the hands 

 of the consumer yearly, and that consisting of all goods whatever which 

 change hands yearly. The basis of the one standard is, to use a bold 

 phrase, the mass of final utility ; the basis of the other standard is, to use 

 a bolder phrase, the momentum of final utility. 



The choice between the Consumption and Currency Standards may per- 

 haps be assisted by a parable. Let us imagine a new game called Trade 

 and Industry. It is to be played with pieces, something like chessmen, 



upon a very imperfect sort of chessboard, represented in the above 

 figure. As in chess pawns become queens when they reach that base 

 towards which they move, so in this game, the pieces trend towards the 



